The Great Microsoft Lobbying Swindle

The Great Microsoft Lobbying Swindle

The Great Microsoft Lobbying Swindle

Joel Brinkley of the New York Times unearthed an increment in Washington sleaze in Tuesday's front-page story about Ralph Reed selling himself to Microsoft to lobby George W. Bush on the Justice Department antitrust suit. There have been plenty of examples in the past of companies, including Microsoft, hiring lobbyists for the sake of their proximity to possible future presidents. But I can't find another instance of a lobbyist being paid to influence a candidate whom he is simultaneously servicing as a paid political consultant. This is a genuine innovation on Reed's part and a fairly grotesque one. Reed acknowledged the wrongness of what he was doing by apologizing and promising to never lobby Bush on behalf of a client again.

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Still, Brinkley missed the essential point of the information he unearthed. Eager to portray Microsoft as engaged in another nefarious effort to undermine the democratic process, he credulously assumed that Reed was actually doing something diabolical in exchange for the undisclosed thousands paid to him. The truth appears to be very nearly the opposite. Like the many other hired-gun lobbyists who have flocked to Microsoft like vultures to carrion, Ralph Reed has been taking Bill Gates for a ride.

First, let me provide a bit of background. In 1997, when the Justice Department brought its antitrust suit against Microsoft, the company was widely blamed for being at fault--by failing to hire lobbyists and dispense wads of campaign cash. A front-page story in the New York Times in December of that year charged that Microsoft had "virtually ignored" the Washington power game until it was hit with the Justice Department's suit. Most of those quoted in that Times story supported the position that Microsoft was being appropriately punished for its hubris. This hubris consisted of failing to pay rent to Washington's self-appointed doorkeepers. As I argued in a column written at the time, Microsoft ought to have been commended, not criticized, for failing to patronize Washington's influence bazaar.

But stung by such criticism and indeed rather naive and gullible about the ways of Washington, Microsoft began doing as it was told by the Times and others. It went on a massive influence shopping spree. In a period of a few months, the company staffed up what had been its tiny Washington office, increased what had been its measly contributions to both parties, and hired just about every free-lance fixer in town. Its new roster included the porcine former Republican National Committee chair Haley Barbour, who was paid $620,000 in 1999, according to lobbying disclosure forms filed with Congress; former Rep. Vin Weber, who got $500,000; as well as Newt Gingrich acolyte Grover Norquist, and even the disgraced Michael Deaver. On the Democratic side, Microsoft took on former Rep. Vic Fazio and Al Gore's close friend Tom Downey, who received a rather stingy $180,000 last year. Apparently, Microsoft also hired Reed's Atlanta-based firm, Century Strategies, in 1998 but no one knew about it at the time because Reed has never registered as a lobbyist. Though part of Reed's defense is that he has been lobbying various leaders in both parties (and not just Bush) since 1998, a spokesman says he is not required to register with Congress because his lobbying contact with federal officials is indirect. (If Reed has actually been charging Microsoft for lobbying Democrats, one hopes the contacts were indirect indeed. If there were a prize for the person least likely to have influence with Democratic politicians, Ralph Reed might well win it.)

What do all these operators do for Microsoft? The essence of influence peddling is to make everyone, including your clients, think you are working strenuously to corrupt the democratic process on their behalf. In reality, the principal task of Microsoft lobbyists such as Barbour and Weber is cashing large checks from Redmond--though their refusal to say what they do for the company leads suspicious minds to assume otherwise. In other words, most corporate lobbying of this sort is a swindle disguised as sleaze.

Ralph Reed is clearly more a swindler than a sleaze. As Joshua Micah Marshall wrote in the American Prospect several months ago, Reed is prone to exaggeration of his political prowess. Apparently, the same is true of his lobbying ability. The specialty of Century Strategies is something known as "AstroTurf" lobbying, which means creating a phony show of grass-roots public opinion. For Microsoft, Reed was doing something halfway between AstroTurf and traditional lobbying. He was supposed to get prominent Bush supporters to write to the candidate encouraging him to oppose the Justice Department's lawsuit. But Reed's AstroTurf was a few blades short of a lawn. Brinkley's second-day story buried the salient fact on Page C22: In exchange for whatever Microsoft paid him, Reed generated exactly one letter from a Bush supporter to Bush about the case. One letter!

In fact, Reed's lobbying effort is worse than a rip-off. It's actually harmful both to Bush as a candidate and to Microsoft as a company. Bush's decisions about what to say about the Justice Department's antitrust case will now be made under a cloud. If Bush follows what are probably his instincts and criticizes the Justice Department's case, everyone will suspect that the decision was made at the behest of the operative who rescued his campaign in South Carolina. So, Reed has essentially muzzled a likely Microsoft ally by pretending to lobby him. With fixers like that, you might as well leave things broken.